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All the news worth reading. (To me anyway)
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Monday, January 30, 2012

SOME Malaysian roads have been named after him. Even a popular brand of coffee has his name. A medal for bravery was once created in his honour.

But legendary Malay warrior Hang Tuah never existed. He is just a myth. As were his four friends and Chinese princess Hang Li Po, who married the Sultan of Malacca in the 15th century.

'Hang Tuah, Hang Jebat and company were all mythical figures. There is no proof that they existed,' renowned historian, Emeritus Professor Khoo Kay Khim, told the Malaysian media two weeks ago.

The remarks were made during an interview on the country's history. It created quite a stir among Malaysians.

The tales of Hang Tuah are found in the Sejarah Melayu or Malay Annals, a semi-historical record of Malay history and the Hikayat Hang Tuah, regarded as a work of fiction of the 16th century.

The Sejarah Melayu was deliberately written on royal command with the intention of recording for future generations the accounts of the deeds and customs of the Malay rulers.

But the authors went a step further by portraying Malay kings as having divine origin and suggesting that Hang Tuah personified the undivided loyalty towards the ruler.

Hang Tuah, along with his four warrior friends Hang Jebat, Hang Kasturi, Hang Lekiu, and Hang Lekir served the Sultan of Malacca in the 15th century. Hang Li Po was the Chinese princess who became the fifth wife of the Sultan.

Many scholars believe that the character of Hang Li Po was created by the authors of Sejarah Melayu to glorify the Malacca sultan and his ties with the Chinese Emperor. There has been no record of her existence in the Ming Chronicles of the Ming Dynasty.

It is natural for those who learnt about the exploits of the warrior in schools in the 1970s and 1980s, to feel betrayed by the historian's remarks that Hang Tuah never existed. It leads Malaysians to wonder if there were other elements in Malaysian history which were myths too and had never existed.

Malaysians in general have been made to believe that the warrior was a historical figure during the height of the Malacca sultanate. Even the national museum in Kuala Lumpur has a bronze mural and other paraphernalia of Hang Tuah in its collection. Lending credence to the belief is the preservation of road names and a well said to have been built by Hang Tuah. There is even a grave said to be that of the warrior, and a village claiming to be his birth place in Malacca, where some villagers claim they are his descendants.

The legend of Hang Tuah has also been immortalised in films, as in the 1957 movie Hang Tuah with Malay entertainment icon P. Ramlee playing the title role, and in the 2004 Puteri Gunung Ledang with singer-songwriter M. Nasir as Hang Tuah.

Similar reverence has been shown in Indonesia where some roads, universities and a naval frigate were named after the famous warrior, as the character was also popular in classical Indonesian literature.

Whether or not Hang Tuah is a fact or fiction, the tales of the warrior are politically important for Umno, leader of the ruling Barisan Nasional, and other Malay rightwing groups today, as they have been in feudal societies of yore.

The stories of Hang Tuah and other tales in Malay history and literature have been used by Umno and other Malay nationalists as proof of the 'Malayness' of Malaysian history, buttressing their claim that the country is Malay.

Hang Tuah's famous quote 'Takkan Melayu hilang di dunia', or 'Malays will never vanish from the earth', has been the rallying cry of Umno to galvanise Malay support behind the party.

Malaysian academic Farish Noor, in his Facebook posting, observed that for decades the Hang Tuah myth was used 'as a vehicle for all sorts of nefarious and dubious ideological ends: as a testament to ethnic majoritarianism, as a primordial claim to land and belonging, as a means to proclaim ethnic dominance'.

The Hang Tuah story is also important because it runs deep in the national consciousness of many Malays who view the figure as a legendary warrior in Malay history.

The man and his friend Hang Jebat are seen as symbols of heroism and patriotism worth emulating by Malays today. Among royal circles, Hang Tuah represents Malay loyalty and deference to the rulers. Such loyalty strengthens the institution of Malay monarchy.

In a country where politics is always seen in racial terms, a seemingly innocuous suggestion that Hang Tuah is just a myth will be met by a spirited defence of the legend by Malay groups.

In fact, these groups had already been up in arms over a suggestion some years ago that the warrior could not have been Malay. Those casting doubt on his ancestry had pointed out that Hang Tuah shared the same surname as the Chinese princess, and that he practised a form of martial arts which Malays of his time had never seen before.

The suggestion was dismissed. This only shows one thing - the legend of Hang Tuah could well be more fiction than fact. But many Malays, including some academics, remain steadfast in their belief of their legend. For at stake is not only a historical fact; but notions of identity and nationality.

Sunday, January 29, 2012

AN EXCITED reader asked if it was possible to use radio waves to cure cancer, as reported in the British media.

A team of scientists led by Professor Boris Pasche of the University of Alabama at Birmingham in the United States says it has proof that low-intensity electromagnetic (EM) waves can cure cancer.

However, its findings, published in the British Journal of Cancer this month, are deemed amazingly implausible by experts. This is because EM waves carry too little energy to have any biological effect.

In 2009, the team published a study of 28 advanced cancer cases, six of whom responded to EM waves. Of these, one with metastatic breast cancer went into complete remission for 11 months while five with different cancers had partial remissions ranging from four to 34 months.

The EM gadget used to treat them looked like a bulky iPad with a coaxial cable coming out of it to terminate in a steel spoon the patient held in her mouth. Through that spoon was delivered low- intensity EM waves of specifiable frequencies for three hours thrice a day.

Last year, the team published another study of 41 patients with advanced liver cancer, of whom 14 had conditions which remained unchanged for six months, one had near-complete and three had partial remissions.

Now, the team has just demonstrated that EM waves can have actual biological effects on cells growing in a petri dish.

In the study just out, both healthy breast and liver cells, as well as breast and liver cancer cells, were subjected to EM waves at various frequencies.

The healthy liver and breast cells continued to grow undiminished but the growth of both types of cancer cells was significantly decreased by EM waves.

Specifically, in growth-suppressed liver cancer cells, genes called XCL2 and PLP2 were suppressed as well.

Interestingly, specific frequencies of EM waves appeared to be quite specific for specific cancers. Those that suppressed liver cancer cells did not impact breast cancer cells while those that suppressed breast cancer cells did not have any effect upon liver cancer cells.

However, these results threaten an article of faith in biophysics that the tiny amount of energy EM waves carry is not sufficient to break down the chemical bonds in DNA. Such breakdowns can lead to mutations, and thence perhaps cancer.

Since EM waves do not carry sufficient energy for such purposes, they cannot cause mutations and thus cancer. This is also why it is asserted that cellphones, all of which emit EM waves, are perfectly safe to use. By the same token, because they carry so little energy, EM waves cannot be used to cure cancer either. (By contrast, radioactive waves carry enough energy to cause mutations and thus cancer. Their energy, properly controlled, is used in radiotherapy to fight cancers.)

The Pasche claim is, in effect, that EM waves can have real biological effects however little energy they may carry. This is an extraordinary claim, which only extraordinary evidence can back up.

If this effect is not real, then possible explanations include scientific fraud and/or random chance effects.

Prof Pasche is already a well-published cancer biologist, so there is no reason for him to cook up data that jeopardises his reputation. But a junior team member might do so to make a name for himself. (Most of the grunt work in a lab is actually done and written up by subordinates, who are young PhDs.)

Here, one is reminded of Dr Jacques Benveniste (1935-2004), who published a 1988 paper in Nature about another hauntingly similar implausibility.

In some allergies, the antibody called anti-IgE causes some white blood cells called basophils to release histamine, which causes blocked or runny nose.

Then already a renowned immunologist, his lab supposedly showed that extremely dilute solutions of anti-IgE - so dilute it was pure water with no antibodies at all - could still make basophils release their histamine anyway.

His explanation was that water actually has memory, the very argument used to justify the practice called homeopathy. Nature published the article with the unusual disclaimer: 'Editorial reservation: Readers of this article may share the incredulity of the many referees... There is no physical basis for such an activity.'

Also, publication was conditioned on a Nature team being allowed to audit his lab and witness his experiments. Aided by Dr Benveniste's people, the Nature team also repeated his experiments under strict conditions in his own lab, but failed to replicate his astounding results.

Because he refused to retract his paper, Nature issued a report of its findings. The Benveniste lab had used inappropriate statistical methods while throwing out negative data. Moreover, contamination with anti-IgE had not been sufficiently prevented. That two co-authors were funded by a homeopathic manufacturer was unreported. His reputation in tatters, his lab eventually closed.

The lesson here is that contamination of experiments and selective use of favourable data, including random chance effects, can give researchers the results that look 'clean' enough for publication.

Thus, one has to be very sceptical of Prof Pasche's claims. Until his results are replicated at multiple centres, not too much hope may be placed on radio waves.

Introversion often fosters creativity by concentrating the mind on tasks in hand

By Susan Cain

Solitude is out of fashion. Our companies, our schools and our culture are in thrall to an idea I call the New Groupthink, which holds that creativity and achievement come from an oddly gregarious place. Most of us now work in teams, in offices without walls, for managers who prize people skills above all. Lone geniuses are out. Collaboration is in.

But there's a problem with this view. Research strongly suggests that people are more creative when they enjoy privacy and freedom from interruption. And the most spectacularly creative people in many fields are often introverted, according to studies by the psychologists Mihaly Csikszentmihalyi and Gregory Feist.

Such people are extroverted enough to exchange and advance ideas, but see themselves as independent and individualistic. They're not joiners by nature.

One explanation for these findings is that introverts are comfortable working alone - and solitude is a catalyst to innovation. As the influential psychologist Hans Eysenck observed, introversion fosters creativity by 'concentrating the mind on the tasks in hand, and preventing the dissipation of energy on social and sexual matters unrelated to work'.

In other words, a person sitting quietly under a tree in the backyard, while everyone else is clinking glasses on the patio, is more likely to have an apple land on his head.

(Newton was one of the world's great introverts: William Wordsworth described him as 'A mind for ever/ Voyaging through strange seas of Thought, alone.')

Solitude has long been associated with creativity and transcendence. 'Without great solitude, no serious work is possible,' Picasso said. A central narrative of many religions is the seeker - Moses, Jesus, Buddha - who goes off by himself and brings profound insights back to the community.

Culturally, we're often so dazzled by charisma that we overlook the quiet part of the creative process. Consider Apple. In the wake of founder Steve Jobs' death, we've seen a profusion of myths about the company's success. Most focus on Mr Jobs' supernatural magnetism and tend to ignore the other crucial figure in Apple's creation: a kindly, introverted engineering wizard, Mr Steve Wozniak, who toiled alone on a beloved invention, the personal computer.

Rewind to March 1975: Mr Wozniak believes the world would be a better place if everyone had a user- friendly computer. This seems a distant dream - most computers are still the size of minivans, and many times as pricey. But Mr Wozniak meets a simpatico band of engineers calling themselves the Homebrew Computer Club. The Homebrewers are excited about a primitive new machine called the Altair 8800.

Mr Wozniak is inspired, and immediately begins work on his own magical version of a computer. Three months later, he unveils his amazing creation for his friend, Steve. Mr Wozniak wants to give his invention away free, but Mr Jobs persuades him to co-found Apple Computer.

The story of Apple's origin speaks to the power of collaboration. Mr Wozniak wouldn't have been catalysed by the Altair but for the kindred spirits of Homebrew. And he'd never have started Apple without Mr Jobs.

But it's also a story of solo spirit. If you look at how Mr Wozniak got the work done - the sheer hard work of creating something from nothing - he did it alone. Late at night, all by himself.

Intentionally so. In his memoir, Mr Wozniak offers this guidance to aspiring inventors: 'Most inventors and engineers I've met are like me ... they live in their heads. They're almost like artists. In fact, the very best of them are artists. And artists work best alone... I'm going to give you some advice that might be hard to take. That advice is: Work alone... Not on a committee. Not on a team.'

And yet the New Groupthink has overtaken workplaces, schools and religious institutions. Anyone who has ever needed noise-cancelling headphones in her own office or marked an online calendar with a fake meeting in order to escape yet another real one knows what I'm talking about. Virtually all American workers now spend time on teams and some 70 per cent inhabit open-plan offices, in which no one has 'a room of one's own'.

Schools have also been transformed by the New Groupthink. Today, elementary school classrooms in the United States are commonly arranged in pods of desks, the better to foster group learning. Even subjects such as mathematics and creative writing are often taught as committee projects.

Some teamwork is fine and offers a fun, stimulating, useful way to exchange ideas, manage information and build trust.

But it's one thing to associate with a group in which each member works autonomously on his piece of the puzzle; it's another to be corralled into endless meetings or conference calls conducted in offices that afford no respite from the noise and gaze of co-workers.

Solitude can even help us learn. According to research on expert performance by the psychologist Anders Ericsson, the best way to master a field is to work on the task that's most demanding for you personally. And often the best way to do this is alone. Only then, Mr Ericsson told me, can you 'go directly to the part that's challenging to you. If you want to improve, you have to be the one who generates the move. Imagine a group class - you're the one generating the move only a small percentage of the time'.

Conversely, brainstorming sessions are one of the worst possible ways to stimulate creativity. The brainchild of a charismatic advertising executive named Alex Osborn who believed that groups produced better ideas than individuals, workplace brainstorming sessions came into vogue in the 1950s.

'The quantitative results of group brainstorming are beyond question,' Mr Osborn wrote. 'One group produced 45 suggestions for a home-appliance promotion, 56 ideas for a money-raising campaign, 124 ideas on how to sell more blankets.'

But decades of research show that individuals almost always perform better than groups in both quality and quantity, and group performance gets worse as group size grows. The 'evidence from science suggests that business people must be insane to use brainstorming groups', wrote the organisational psychologist Adrian Furnham.

'If you have talented and motivated people, they should be encouraged to work alone when creativity or efficiency is the highest priority,' he said.

The reasons brainstorming fails are instructive for other forms of group work, too. People in groups tend to sit back and let others do the work; they instinctively mimic others' opinions and lose sight of their own; and, often succumb to peer pressure.

The one important exception to this dismal record is electronic brainstorming, where large groups outperform individuals; and the larger the group the better. The protection of the screen mitigates many problems of group work. This is why the Internet has yielded such wondrous collective creations.

Marcel Proust called reading a 'miracle of communication in the midst of solitude', and that's what the Internet is, too. It's a place where we can be alone together - and this is precisely what gives it power.

Susan Cain is the author of the forthcoming book Quiet: The Power Of Introverts In A World That Can't Stop Talking.

AS CHINA gains on the world's most advanced economies, the country excites fascination as well as fear, particularly in the United States, where many worry that China will supplant America as the 21st century's superpower. Many ask how China has grown so much so fast, whether the Communist Party can stay in power and what Beijing's expanding global influence means for the rest of us. To understand China's new role on the world stage, it helps to rethink misconceptions that dominate Western thinking.

China's rise is marginalising American influence in Asia

Just the opposite. Certainly, China's power in Asia is growing; its economy is now the biggest in the region, and the country is the largest trading partner for every Asian nation. And its military modernisation has made the People's Liberation Army a more lethal fighting force.

Wednesday, January 25, 2012

THIS year's economic outlook is more uncertain than usual on account of global and regional imponderables.

The United States economy is improving, but whether it is sustainable is an open question. The euro zone debt problem has yet to be resolved, and the extent to which austerity measures will be imposed and their consequences remain to be seen. Japan's outlook is uncertain, China may get a soft landing, and India appears mired in political gridlock. Singapore has registered negative quarter-on-quarter growth in the last quarter of 2011. Whether there will be a technical recession this quarter, or economic restructuring and possible external improvements will 'carry us through', also remains to be seen.

Against this backdrop, policymakers should attend to three broad areas - one relatively short-term and the others somewhat longer-term. Flexibility and contingency planning are needed in this year's Budget. The economy may grow reasonably well in the coming quarters, or it might slip into recession. Infrastructural plans and other improvements should be formulated well in advance, and their implementation - whether to be brought forward or delayed - made contingent upon the economic situation, to the extent practicable. We should 'keep our powder dry', and be able to institute the requisite policy changes quickly in response to the unfolding situation.

Second, from a longer-term standpoint, a wide range of policy measures has been instituted (or reinforced) after last year's general election - in housing, health care, labour and immigration, the social safety net, and others - with more being contemplated.

These are very welcome developments, but the proof of the pudding is in the eating. We need to assess over time whether the measures are achieving the desired effects. Is housing actually becoming more affordable? Are our bottom 20 per cent actually getting better off, in both absolute and relative terms? Is the MRT system's congestion and overcrowding being mitigated? And so on. There is a need for continual monitoring and evaluation of policy initiatives and if they fall short, further measures will be needed.

Thirdly, the issue of inflation and the real returns (nominal returns minus the inflation rate) on Singaporeans' CPF savings. In recent years, there have been two sharp spikes in the consumer price index (CPI) inflation rate - 6.61 per cent in 2008, and 5.05 per cent in January-November 2011. [The Monetary Authority of Singapore's core inflation measure, which among other things excludes accommodation costs, appears less appropriate since significant amounts of Central Provident Fund (CPF) balances are utilised for housing purchases].

In those years, the real return on Ordinary Accounts (nominal return was 2.5 per cent) was negative, as indeed were the real returns on Special, Medisave and Retirement Accounts. If inflation returns to low levels relative to nominal interest on CPF balances, then the foregoing spikes are not a significant concern. However, in the current unsettled environment, low inflation cannot be ensured. What if inflation hovers between 3 per cent and 5 per cent, and nominal interest rates remain low, imposing negative real returns? Should we have contingency plans for such a scenario?

A related issue deserves a brief comment. Currently, the CPF Board invests mostly in Singapore government bonds, and the general understanding is that these funds form part of the Government of Singapore Investment Corporation's (GIC's) total financial resources, which are invested in a diversified portfolio of assets worldwide. In recent years, up to half of the net investment income (NII) earned from abroad by the Government (including presumably by the GIC) can be used in its annual budgetary outlays. Does the NII arise from the investment of the Government's total financial resources, including from the CPF? Transparency on this would be enlightening.

As mentioned before, the CPF Board invests largely in government bonds, with returns set in nominal terms. The Government should also consider issuing inflation-indexed bonds, as many countries such as the United States, the United Kingdom, Japan, Canada and France have done.

According to a factsheet issued by the CPF Board in October last year, the '10-year annualised real Ordinary Account rate' has averaged about 1.5 per cent over the post-1995 period, and this appears to be a reasonable rate at which to set the real interest rate on Ordinary Accounts (with that on Special, Medisave, and Retirement Accounts one percentage point higher). So if the CPF Board were to invest in inflation-indexed government bonds bearing these real rates of return, it could provide virtually the same real returns to its account-holders.

These would be non-marketed bonds, held to maturity by the CPF Board. The bonds' maturities should be chosen over time to match the likely schedule of net total withdrawals from the CPF by individuals. As such, fluctuations in the notional market prices of these bonds would not be of material consequence. 'Inflation-proofing' Singaporeans' CPF savings in this manner would be particularly beneficial if we face the prospect of negative real CPF interest rates for protracted periods under the current arrangements.

The 'inflation risk' would be transferred to the Government. But given the handsome long-term returns which the GIC, and possibly Temasek as well, had previously reported - an undue portion of which should not be used to finance budgetary outlays - such risk should be manageable. Inflation indexation is potentially highly beneficial and deserves to be considered further.

The writer is a professor and director of the Singapore Centre for Applied and Policy Economics, Department of Economics, National University of Singapore.

TAMPA/WASHINGTON (REUTERS) - Republican presidential candidate Mitt Romney released tax records on Tuesday indicating he will pay US$6.2 million (S$7.85 million) in taxes on a total of $45.2 million in income over the years 2010 and 2011.

Bowing to increasing political pressure to provide more detail about his vast wealth, the former private equity executive released tax returns indicating he and his wife, Ann, paid an effective tax rate of 13.9 per cent in 2010. They expect to pay a 15.4 per cent rate when they file their returns for 2011.

Mr Romney's tax rate is below that of most wage-earning Americans because most of his income, as outlined in more than 500 pages of tax documents, flows from capital gains on investments.

Under the United States tax code, capital gains are taxed at 15 per cent, compared with a top tax rate of 35 per cent for wage earners.

Mr Romney released the tax returns after a week in which his chief rival for the Republican presidential nomination, former House of Representatives Speaker Newt Gingrich, questioned whether Mr Romney was hiding information about his finances and cast him as being out of touch with most Americans.

Mr Gingrich's attacks on Mr Romney helped him upset the former Massachusetts governor in the South Carolina primary on Saturday.

Since then, Mr Romney has vowed to be more aggressive in returning fire.

He has launched a series of attacks questioning Mr Gingrich's character, judgment and lucrative work as a Washington consultant, and released his tax returns to try to nullify Mr Gingrich's criticisms on that front.

The tax rates Mr Romney reported paying could add fuel to a national debate over the fairness of the tax code, and coincides with broader concerns about income inequality symbolised by the Occupy Wall Street movement.

Mr Romney's campaign officials stressed that his tax rate is based mostly on income from investments that are held in a blind trust. Mr Romney's holdings include an undisclosed amount in funds based in the Grand Cayman Islands and other overseas entities.

Mr Romney advisers stressed that the holdings in the Caymans - along with those in a Swiss bank account that was closed in 2010 after an investment adviser decided it could be politically embarrassing to Mr Romney - were reported on tax returns and were not vehicles to avoid taxes.

They also stressed that Mr Romney, whose holdings are in three blind trusts, makes no decisions as to how his money is invested.

Regardless, the emerging picture was of a man of great means who contributes mightily to charity. The documents showed he and his wife contributed US$7 million in charity over the two years, much of it going to his Mormon church.

Mr Romney, whose estimated net worth is between US$190 million and US$250 million, is among the wealthiest Americans ever to seek the presidency.

[The first thing to note is that if Romney is elected president, the US$400,000 a year salary is not the reason he is seeking the presidency.He neither needs the money or wants it. He pays more in taxes and gives more to charity than what he would earn as a president.

The second thing to note is that a flat tax on capital gains values wealth make with cash, than with effort. Capital gains tax should have a deductible for say the first $60k or $200k (depending on how generous you want to be, but after that, the tax rate should not be less than income from work.

Assuming a retiree has invested wisely, if he is able to generate $60k in annual capital gains, that can finance his retirement more than comfortably. Gains beyond that is wealth that should be taxed.

In comparison, Obama tax for 2010 was US$1.8m for his income of US$5.5m or about 33% tax rate. Most of his income is from book sales.]

Tuesday, January 24, 2012

We recently looked at one of the potential contenders in the US$10 million Qualcomm Tricorder X PRIZE, which as the name suggests, was inspired by the medical tricorder of Star Trek fame. Now scientists have developed a new way of creating Terahertz (THz) or T-rays, which they say could help make handheld devices with tricorder-like capabilities a reality.

T-rays are electromagnetic waves in the far infrared part of the spectrum that have a wavelength hundreds of times longer than visible light. With their ability to penetrate fabrics and plastics, T-rays are already used in full-body security scanners at many airports to detect weapons, drugs and explosives. But with T-rays being non-ionizing - unlike X-rays - and every molecule having its own signature in the THz range, it is their potential for medical and other applications that have the researchers excited.

Not only can THz waves detect biological phenomena, such as increased blood flow around tumorous growths, but they can also sense molecules such as those present in cancerous tumors and living DNA. Additionally, T-rays can also be used in gas pollution monitoring and non-destructive testing of semiconductor integrated circuit chips.

While we've seen compact T-ray spectrometers before, researchers from the Institute of Materials Research and Engineering (IMRE) at the Agency for Science, Technology and Research (A*STAR) in Singapore and Imperial College London in the UK say they have developed a way to produce stronger and more efficient T-rays at room temperature conditions in a much stronger directional beam than was previously thought possible. It is this breakthrough they claim will allow future T-ray systems to be smaller, more portable, easier to operate, and much cheaper.

The team produced a strong beam of T-rays by shining light of differing wavelengths on a pair of electrodes, which took the form of two pointed strips of metal separated by a 100 nanometer gap placed on top of a semiconductor wafer. This tip-to-tip nano-sized gap electrode structure acts like a nano-antenna to significantly enhance the THz field and amplify the THz wave generated. The researchers say that arrays of their new nano-antennas can generate a power output that is 100 times higher than the output of commonly used THz sources, which provides T-ray imaging devices with more power and higher resolution. As the wavelength of the T-rays can be tuned, the researchers are able to create a beam that is useable in the scanning technology.

"T-rays promise to revolutionize medical scanning to make it faster and more convenient, potentially relieving patients from the inconvenience of complicated diagnostic procedures and the stress of waiting for accurate results," said study co-author, Stefan Maier. "Thanks to modern nanotechnology and nanofabrication, we have made a real breakthrough in the generation of T-rays that takes us a step closer to these new scanning devices. With the introduction of a gap of only 0.1 micrometers into the electrodes, we have been able to make amplified waves at the key wavelength of 1000 micrometers that can be used in such real world applications."

The team's paper, "Greatly enhanced continuous-wave terahertz emission by nano-electrodes in a photoconductive photomixer," is published in the journal Nature Photonics.

Add another B to the 'Taiwan threat'Ballots, that is. Smooth election on island raises tough questions in China

By Peh Shing Huei

BEIJING: For more than 60 years, the ruling Chinese Communist Party (CCP) has viewed Taiwan as the source of two major threats to the mainland. Pithily put, they are: bullets and break-up.

In the early decades after the end of the Chinese civil war, bullets were the chief concern as the communists feared a military invasion by Generalissimo Chiang Kai-shek's Nationalist troops with the help of the Americans. To 'retake the mainland' (fan gong da lu) was the defeated Kuomintang leader's war cry as he and his defeated forces retreated to the island of Taiwan in 1949.

But as Taiwan broke free of the shackles of martial law in the 1980s, the mainland was confronted with the second feared B: break-up, as pro-independence leanings grew on the island, which Beijing regards as a breakaway province.

Most recently a third B has emerged in Taiwan to join the list : ballots. Specifically, it has to do with the outcome of the Taiwanese presidential election last weekend and its significance for China.

The election - the island's fifth successive one - exhibited many signs of a maturing democracy. It was a sharp contrast, a challenge even, to the authoritarian controls on the mainland.

The vigour of the contest, with its noisy campaigns, televised debates and rousing rallies, was witnessed by millions of Chinese across the strait. Many took note too of how it concluded after all the sound and fury. As a Chinese netizen asked: 'The textbooks teach us (Western) democracy is not suitable for China, but isn't Taiwan part of China?'

That observation highlighted a striking contradiction in the Communist Party's propaganda, placing two of its key tenets at odds with each other. On the one hand, the CCP has insisted that China is not suited for Western-style democracy. But on the other hand, it has maintained that Taiwan is a part of China.

As the island's democracy matures, the CCP will have to find a way of getting out of the corner in which it has painted itself ideologically.

In the recent past, Beijing could point to the messiness of Taiwanese democracy as a good example of why it is folly to go down the Western route of voting for one's leaders.

But last Saturday's polls have shown that chaos, and violence even, are not in-built traits of democracy on the island.

Both the incumbent, Mr Ma Ying-jeou, and opposition leader Tsai Ing-wen steered clear of personal attacks, focusing instead on which side is better equipped to build up Taiwan's economy and improve the people's lot.

Compared to elections past, negative campaigning on the ground was much reduced. Thankfully too, voters were spared histrionic last-gasp tactics of kneeling for votes and public sobbing.

Widespread fears of another shooting incident, which roiled the 2004 polls and sparked much controversy over its role in Mr Chen Shui-bian's election, were also not realised. What Taiwan got instead was a calm and dignified conclusion to a hard-fought contest.

Ms Tsai, who lost, conceded quickly and graciously when it became clear the results were not in her favour. 'I know a lot of supporters will feel heartbroken by what I have to say. But we still have to congratulate President Ma,' she said. 'We hope that in the next four years, he will listen to the voices of the people, govern with his utmost effort and treat every single citizen fairly. Please do not let the people down.'

No protests, no spiteful comments. The people of Taiwan have spoken and the candidates respected their choice. Ms Tsai took responsibility for her defeat by resigning as the chairman of the Democratic Progressive Party. Mr Ma was similarly gracious in victory, promising to hold semi-annual meetings with opposition leaders.

These developments did not go unnoticed by the mainland's 500 million-strong netizens. Millions watched the election online, marvelling at the real-time reporting of the vote count and how smoothly and safely the contest went. It was inevitable that comparisons were drawn with China's politics.

An online user by the nickname of Brother Xiang Times pointed not just to the fact that the Taiwanese had the ballot and mainland Chinese none, but also to other aspects of the relationship between the leaders and the led: 'Mr Ma had his whole family come out, with everyone under the spotlight working their butts off, begging for votes. On this side (of the strait), any information about the family members of President Hu (Jintao) is considered 'state secret'; if one uploads a photo of his daughter, it would be immediately deleted.'

The online clamour in support of the Taiwan model grew so loud that the state media stepped in, with the Global Times dismissing the validity of the comparisons. 'The systems designed for modern countries are not exactly suitable for gigantic countries like China,' it said in its editorial on Tuesday. In short, China is too big for democracy.

But Taiwan's presidential election has shown that democracy is not some alien and incompatible Western import, and that is leading many mainlanders to raise discomforting questions for their leaders.

One Chinese netizen asked pointedly: 'The Taiwanese people already govern their own country, how long do the Chinese people have to wait?'

The 'China exceptionalism' argument against holding free and fair elections is consistent with the CCP's views on politics. But with Taiwan as a counter-example, it will be increasingly tricky for Beijing to convince its people that what is practised and celebrated on the island is somehow not appropriate for the mainland.

Short of saying Taiwan is fundamentally different - which would then raise the even more unacceptable issue of secession - Beijing has to consider political reforms if it wants to realise its dreams of a grand reunion with the island.

shpeh@sph.com.sg

[Interesting commentary and analysis. Taiwan may "win" by spreading democratic ideals to the mainland, and the Communist Party on the mainland will either have to explain or adapt. Adapt might be easier. Again, they may turn to Singapore for inspiration as to how to implement their ideas. Or not.]

Tuesday, January 17, 2012

Slower growth could be tougher to manage than a short, sharp recession

By Robin Chan

HERE'S something to ponder: Could a bout of slow growth possibly be more painful than the boom and bust of a severe recession?

That question has arisen as the Singapore economy faces a period of slowing growth. The Monetary Authority of Singapore last week said the economy would likely 'stall' for several quarters before picking up late next year.

It predicted that next year, Singapore would grow below its potential rate of 3 per cent to 5 per cent. If so, this would be the third time in five years Singapore fails to hit its growth potential of 3 per cent to 5 per cent.

A slowdown from 5 per cent to less than 3 per cent is nothing like the sharp, deep contraction in 2009. That was when the economy was slated to shrink by more than 6 per cent in the first half of the year, but eventually fell just 0.8 per cent for the full year.

While some economists would argue that a gradual slowdown is less painful than a recession, others like economist Irvin Seah from DBS Bank say it is like choosing between a heart attack and a slow death.

They warn that this round of slower growth may prove as painful as the previous recession for two reasons. First, the effects will be felt across the board as fewer jobs are created, unemployment creeps up, and inflation persists.

Second, it will last a whole lot longer. As Prime Minister Lee Hsien Loong put it starkly over the weekend, Singapore is past its 'adolescent' phase of shooting up 5 per cent to 7 per cent each year. In this different mature phase, hitting 3 per cent to 4 per cent is 'not bad'.

Like it or not, a new era of slow growth is now upon Singapore. Economists warn that the effect of this will be longer and more widespread than the short, sharp recession of 2009 when job growth plunged and unemployment rose.

This time, while the local economy is not quite flatlining, the anaemic growth next year could see unemployment creep up from the 2 per cent rate at the year end, to hover around 2.3 per cent for a while, said CIMB economist Song Seng Wun.

Mr Song has slashed his job creation forecast next year by 20,000 jobs to between 60,000 and 65,000 new jobs. This is compared with an estimated 95,000 new jobs that will be created this year.

With slower growth and an easing jobs market, wage growth will also cool, which will affect many workers.

Another painful side effect for Singaporeans: Inflation may be trickier to beat in a slowdown compared with a recession.

In 2009, the global recession saw record high inflation finally come off, as companies reduced production sharply and consumers cut back on spending, causing prices to fall quickly. Inflation fell from 6.6 per cent in 2008 to 0.6 per cent in 2009.

But slow growth can ironically sustain inflationary pressures. Companies continue to produce and households continue to consume, keeping up demand and hence prices, even though growth is already slowing.

Bank of America-Merrill Lynch's Dr Chua Hak Bin has forecast inflation to average 5.2 per cent this year and 3.9 per cent next year, above the long-term average inflation rate of about 2 per cent.

An inflation rate that refuses to go down when growth slows makes it more challenging for Singapore's central bankers to manage monetary policy as they have to watch both inflation and growth.

This was demonstrated by the Monetary Authority of Singapore's recent decision to keep the Singdollar on an appreciation path, albeit a more gradual one. A strong Singapore dollar makes imports cheaper and helps bring down price levels. But it also makes exports more expensive and less competitive, hurting firms and hence growth.

If wage growth is slow and prices take a long time to fall, the purchasing power of Singaporeans may also be eroded.

Is there a way out of the slow growth conundrum? Unfortunately, economists say that looking ahead, there will be no 'easy growth' for Singapore.

There appears to be no spark, as there was in 2009 with the opening of the two integrated resorts, to jumpstart the economy. Those contributed more than half of the $7.9 billion in value-added to the economy last year from tourism. A shift in policy to tighten the tap on foreign workers may also constrain growth.

Nor can Singapore rely on the electronics upcycle, which last year fuelled an exceptional boom in manufacturing. The electronics upswing has run its course and the sector is contracting.

The drugs sector which expanded early last year, is also notoriously volatile.

Trade-dependent Singapore is not getting much of a helping hand from the major economies either. The green shoots of recovery from the global recession never really blossomed into anything sustainable, and the major economies are slowing down, including China.

Growth going forward will therefore be more difficult and will have to come from productivity enhancements, supported by government initiatives to retrain workers and subsidise technology investments, say economists.

And while there will be continued investments in promising sectors such as clean energy and aerospace, these will take time to realise their full potential.

In such an environment, policymakers have to make sure that a period of slow growth does not translate to the country just 'muddling through' - accepting slow growth as the inevitable reality of a maturing economy and the current global uncertainty, and not taking active steps to boost the economy and the living standards of Singaporeans in the long run.

As PM Lee said on Sunday: 'When you're an adolescent, you grow and shoot up inches every year; but when you're mature, you hope to grow, not necessarily taller, but wiser and better. We have to make that change of gear.'

Singapore not only needs to work harder to sustain a slowing rate of growth. It will also have to ensure that growth is of good quality - broad-based, and helping workers move up the value chain.

In short, slow growth may not sound quite as daunting as a recession for now.

But in the medium term, the challenges - and the adjustment and pain of change - will be no less difficult.

Sunday, January 8, 2012

SOME experts have opined that slow growth may not be bad, especially if it allows the Government to tackle some of the nation's woes ('The slow and steady way to grow'; Dec 16).

However, a drop in economic growth from 6 per cent to 3 per cent or 4 per cent would mean zero or negative growth for many companies. Employees of these companies may suffer a pay freeze or retrenchment.

Low growth would cause a multiplier effect in subsequent years. Future investments may be put on hold or trimmed.

When growth slows, there would be less government revenue for welfare services or for subsidising workers' training. One economist said some Western countries grow only at around 2 per cent and yet have good welfare systems. We can have that too, but are we prepared to pay higher taxes?

Also, unlike those countries, we have no natural resources.

A labour leader said that when the economy slows down, workers would have more time to go for training. If the setback the companies face is not a temporary one, would the companies still sponsor the training, and what purpose would the training serve?

An economist said that slow growth may not be bad if it helps narrow the wage gap. A manager with a $10,000 salary, who used to get a $500 salary increase, may now get only $200 because of the slowdown. But the tea lady who earns $800 is unlikely to get a similar increase. The income gap would still widen but perhaps at a slower pace.

Another expert opined that inflationary pressures could ease with slower growth. But when our economy slows down, our export earnings would drop and our exchange rate would suffer, causing imported goods to be dearer. The relationship between growth and inflation is not that straightforward.

It is unrealistic to expect the high growth of 8 per cent to 10 per cent to repeat in the future. On the other hand, slow growth of 3 per cent or lower over the long term would bring about new problems and constraints.

The most serious consequence is: Singapore would slowly lose its international standing and attractiveness as a modern city.

It would be a grave mistake if we voluntarily opted for slow growth when other regional cities might be striving for a growth of 8 per cent or higher. We could lag behind them, but must not be too far off.

Ng Ya Ken

Ben Bernanke spoke on the Economics of Happiness too. While GDP isn't everything, like money it may not buy you happiness, but it helps.

Like a silent but lethal pugilist in a wuxia film, he swept into the political arena and swiftly became one of the opposition's biggest stars.

The buzz around Workers' Party MP Chen Show Mao, 50, began in March when word went around that the party had netted a 'star catch'. It turned out to be the top corporate lawyer with a string of degrees from Oxford, Harvard and Stanford universities.

His donning of WP colours was a milestone, showing the opposition too can boast candidates as qualified as those from the People's Action Party. Alongside party leaders Low Thia Khiang and Sylvia Lim, he went on to make history as part of the WP team that in May won Aljunied GRC, the first GRC to be snared by the opposition.

His celebrity aura still lingers. A deft user of social media, Mr Chen's each post on his Facebook page gets hundreds of 'likes' and comments. But 2012 will be a test of his mettle as the glow from his team's election victory fades and the WP MPs get used to the routine of parliamentary sittings and running a GRC from day to day.

Thus far, Mr Chen, who quit his job at international law firm Davis Polk & Wardwell in July, has shown himself to be an astute politician. He has tapped into a vein of discontent against the ruling party and its policies, inspiring many who think Singapore's political system can and should have more alternative voices.

He also delivered a soaring maiden speech when Parliament opened in October, laying out a vision of the WP role in the House.

Still, Mr Chen has mainly spoken of his political aspirations in broad strokes, and has remained cautious in offering specific policy ideas. All eyes will thus be on him next year when he delves into policies in Parliament speeches and tends to residents in his ward.

Offering a hint of his aspirations, he says in an e-mail: 'I hope that in 2012 I will learn to serve better both precinct and Parliament.

'My new year wish for Singapore is: inclusive Growth + growing Inclusiveness. For Singaporeans, peace of mind. For all, peace on Earth.'

ANDREA ONG

Chan Chun Sing - Next PM?

From a young age, Mr Chan Chun Sing has been a high-flier. A President's Scholar at 18, he became Chief of Army at 40. Now, at 42, he is one of the youngest ministers to be appointed to the Cabinet.

This has fuelled talk that the Acting Minister for Community Development, Youth and Sports (MCYS) is a front-runner to become the next prime minister. Prime Minister Lee Hsien Loong aims to step down by 2020.

While these are early days, observers concur that his performance has been promising. They hail recent MCYS plans - such as more resources to support services for the elderly, initiatives to help the disabled and improving the childcare sector - for delivering welcome government aid. Those who have worked with the Cambridge economics graduate speak of his sharpness in analysing issues.

His portfolio gains special significance next year as a slowdown looms and demand for social aid increases. Mr Chan says he wants to make the social service sector more effective, and to achieve economies of scale while maintaining its 'personal touch'.

Meanwhile, the challenge of winning the support of more critical younger Singaporeans continues. He is making some headway, engaging young Singaporeans and bloggers in informal dialogues to discuss issues ranging from problem gambling to the role of the media.

The year has not been without missteps. An 'army-style' speech, peppered with Hokkien and Malay phrases, at a People's Action Party (PAP) event in April drew derision from netizens. The self-professed introvert says he has had to work at public communications.

Asked about talk that he could be the next prime minister, he demurs. 'Times or circumstances change and you never know what sort of leaders you need. The PAP's job is to groom a group of leaders that is cohesive and when the times change, you have one of them with the necessary skill set and the rest are there to support,' he says. 'No point anointing a crown prince and the rest of the team are not there.'

Straits Times, Jan 6, 2012
Insight looks through records of parliamentary debates to find out when ministerial pay first became a contentious issue, and how the debate has shifted over the years

By Andrea Ong

1970

MINISTERS' salaries are raised for the first time in independent Singapore, from $2,500 a month to $4,500.

Their wages were previously frozen to set an example of wage restraint for other Singaporeans in the young country.

Prime Minister Lee Kuan Yew tells Parliament that the salaries are being raised because he wants to appoint newly elected MP Hon Sui Sen, who used to head the Development Bank of Singapore, as the Finance Minister.

Earlier that year, Law Minister E.W. Barker had asked to leave politics as he could not afford his mortgage, which was based on his former income as a lawyer.

It is 'not fair' and 'unrealistic' to ask ministers to earn a wage 'out of all proportion to what they were earning outside the Government and whose family needs are also pressing', says Mr Lee in Parliament.

Also, it will be impossible to attract men of integrity and ability to become ministers with the existing pay once the current ministers leave office.

His own pay will, however, remain at $3,500 to demonstrate his commitment to the policy of no wage increases without productivity growth, he says.

1972

The National Wages Council (NWC) is formed and recommends the payment of the Annual Wage Supplement - the '13th month bonus'. It is adopted by the civil service and political appointment holders. One reason cited is to reduce the gap between public and private sector pay.

This kicks off a series of periodic pay increases for ministers and civil servants in subsequent years.

1981

By March this year, ministers' monthly pay has increased to $11,500. Mr Lee's pay is now $16,500.

Mr Lee notes in Parliament that times have changed since the 'revolutionary conditions' of the 1950s and 1960s, when people were more willing to sacrifice for their ideals and ministers could be recruited from both Singapore and Malaya.

Said Mr Lee: 'Now, our selection is confined only to Singaporeans. This makes it all the more crucial that some six to 10 of the best in the professions, from banking, and from industry, be recruited into the political leadership. Otherwise the Cabinet will simply not be equal to the more complex tasks of government.'

1985

During an extensive debate on ministerial salaries, Mr Lee introduces another reason for paying ministers a reasonably high sum: to keep Singapore's political leaders clean and corruption-free.

He was responding to Workers' Party (WP) MP J.B. Jeyaretnam's charge that ministers here were paid much more than their counterparts in Malaysia, Australia and Britain.

Mr Lee argues that ministers do not get hidden perks, unlike those in other countries. The clean wage paid to them helps preserve Singapore's 'most precious asset': an administration that is corruption-free.

Says Mr Lee: 'I am probably the highest paid in the Commonwealth if you go by official salary. But I am probably one of the poorest in the Commonwealth... I am one of the best paid and probably one of the poorest of the Third World prime ministers.'

Mr Lee says he has been a 'kept man' all his years in public service, with his wife and three brothers in the private sector all earning more than he does.

Mr Lee also challenges Mr Jeyaretnam, who earlier called for ministers to have a sense of proportion, to say by how much he would cut the total ministerial wage bill of $4.66 million.

To the reply of at least a third, Mr Lee retorts: 'So it will go down to $3.1 million... And then we all become honour-able men who have suddenly sacrificed ourselves for duty and public service. Let us have a sense of proportion.'

1989

Ministers' pay rises to a gross monthly sum of $28,644. The prime minister's gross monthly pay is $49,608. Variable bonus is raised by half a month. A performance bonus of up to two months' pay is introduced for the first time.

Also for the first time, the Government introduces 'make-up pay' to attract talent from the private sector. When such people join as new ministers, they can be paid up to 90 per cent of the difference from their old wage for up to two terms of office. This draws much criticism from MPs.

The policy has never been applied.

1993

An impending pay rise for ministers is announced in December.

Prime Minister Goh Chok Tong tells Parliament that while he cannot pay ministers what they would earn in the private sector, the pay must still be such that the younger generation would consider it worth sacrificing their previous comforts and privacy for.

He is already finding it increasingly difficult to persuade talented individuals to become ministers, he says.

While acknowledging the political cost of the pay increase, Mr Goh said: 'If we do not pay ministers adequately, we will get inadequate ministers. If you pay peanuts, you will get monkeys for your ministers. The people will suffer, not the monkeys.'

In January, Senior Minister Lee Kuan Yew proposes a formula to peg ministers' pay to private sector incomes. Such a formula removes the need to justify pay revisions every few years as adjustments based on income tax figures could be made automatically each year.

'Ministers' pay will then go up or down with the private sector, and never get seriously out of line,' said Mr Lee.

In October, a White Paper on 'Competitive salaries for competent and honest government' is presented to Parliament.

It proposes a benchmark which sets a junior minister's pay at two-thirds the average principal income of the top four earners in six professions: bankers, accountants, engineers, lawyers, local manufacturing companies and multinational companies.

The one-third discount would be a 'visible demonstration of the sacrifice involved in becoming a minister'.

Three days of intense debate follow. Many backbenchers, including People's Action Party (PAP) MPs Wang Kai Yuen and Tan Cheng Bock and opposition MP Ling How Doong, express discomfort with putting a price to public service as ministers are not the same as top private sector earners.

Opposition MP Chiam See Tong and Nominated MP Walter Woon argue that ministers should be paid enough to lead a comfortable lifestyle but should not compete with top earners. Mr Chiam suggests a monthly pay of $50,000 for ministers.

1995

In January, an independent panel sets the prime minister's pay at twice that of the most junior minister - a rule of thumb still in place today. Mr Goh, who earns $1.15 million a year, would see his pay increase to $1.6 million.

He also decides to forgo any salary increase for himself for five years.

In October, Dr Tony Tan returns to Cabinet as deputy prime minister and labour minister after having left in 1991 for OCBC Bank. He declines Mr Goh's offer of make-up pay, saying: 'I think that there has to be a financial sacrifice when one goes into the Government. I don't think that it is conscionable for me to expect the Government to pay me what I'm now getting at the bank.'

1997-1999

Asian financial crisis. Ministers' pay is frozen even though the benchmark rises. They take an extra pay cut in 1997 when employers' Central Provident Fund (CPF) contribution is slashed from 20 to 10 per cent to keep the economy competitive.

2000

Extensive revision of the salary structure for ministers and civil servants. Junior ministers' pay lags behind at just 10 per cent of the benchmark. The benchmark itself is found to be too narrow and unrepresentative.

The benchmark for a junior minister's pay is changed to two-thirds of the median income of the top eight earners in six professions.

The new formula considers a broader sample - the top 48 earners instead of the previous 24. And to avoid being skewed upwards by a few extremely high earners, it uses median instead of average income and only considers half of the stock options awarded to the top earners.

The previous fixed salary points for ministers are converted to salary ranges. Junior ministers are now appointed at the MR4 range, a system still in place today.

The variable component of ministers' pay is increased from 30 to 40 per cent. This way, a larger part of a minister's pay will depend on his performance and the state of the economy, said Deputy Prime Minister Lee Hsien Loong.

For the first time, a new gross domestic product-related bonus of up to two months is introduced under the ministers' variable pay. It will later range from zero to six months.

The performance bonus of ministers also rises to five months' pay, from an average of four months' pay.

After the revision, the Prime minister receives a yearly pay of $1.94 million and a junior minister, $968,000.

Again, the topic is hotly debated in the House. Many MPs criticise the timing of the raise, which comes after a transport fare hike and when workers' CPF cuts have not been restored.

Mr Chiam repeats his 1994 call for moderation and a monthly salary of $50,000 for ministers - enough to pay for a bungalow, servants, two cars, annual holidays and their children's education.

2001-2006

Ministers' salaries are cut twice, once in November 2001 after the 9/11 terrorist attacks, and once in July 2003 after the Sars outbreak. They are restored in 2004 and 2005.

2007

Another salary revision. Ministers' pay now stands at only 55 per cent of the benchmark, and the Government moves to raise it to 73 per cent by the year end.

The variable portion of ministers' annual pay rises to 47 per cent - nearly half of their annual package.

The traditional car allowance is scrapped, but performance bonus is increased to a typical seven months, up from five months before.

The GDP bonus is also raised. It can now range from zero to eight months.

An acrimonious debate ensues in the House. Some PAP MPs say the raise is only pragmatic, while others like Ms Denise Phua and Mr Lim Biow Chuan argue in favour of the spirit of public service.

WP Non-Constituency MP Sylvia Lim says the average worker's monthly wage would be earned by ministers in two to three hours.

WP MP Low Thia Khiang argues that other countries like Finland and Denmark pay their ministers much less but do just as well as Singapore.

Minister Mentor Lee Kuan Yew rises for the first time in two years to rebut, saying that Mr Low's comparisons are not valid. Singapore's transformation from the 1960s to now 'requires an extraordinary government with extraordinary government officers to support it'.

And if Singapore did not believe in investing in top talent for its ministers, it might have ended in tatters: 'Your apartment will be worth a fraction of what it is. Your jobs will be in peril, your security will be at risk and our women will become maids in other people's countries.'

After the revision, junior ministers earn $1.59 million. The Prime Minister earns $3.09 million, up from $2.46 million. However, Prime Minister Lee Hsien Loong declares that he will donate the increase to charity for the next five years.

2011

Ministers' pay in 2010 stood at 67 per cent of the benchmark after planned increments were deferred due to the 2009 financial crisis.

About 40 per cent of their pay is variable. Performance bonus can range from zero to 14 months, while GDP bonus varies from zero to eight months.

The issue of political salaries is a contentious one in the May general election and even in the August presidential election, when two of the four candidates pledge to donate part of their pay to charity if elected.

On May 21, PM Lee Hsien Loong announces that he has appointed a committee to review political salaries.

This week, the committee, headed by Mr Gerard Ee, releases its recommendations in a report titled 'Salaries for a capable and committed government'.

It proposes changing the benchmark formula for a junior minister to 60 per cent of the median income of the top 1,000 earners who are Singapore citizens.

The discount and sample size are bigger, and foreigners and PRs are excluded from the benchmarking sample.

The variable component in pay has been slashed to prevent large swings from year to year. The performance bonus is now smaller - up to six months instead of up to 14 months.

The GDP bonus has been scrapped. In its place is a National Bonus of up to six months which considers four indicators - economic growth, real income growth rates for average and poor Singaporeans, and unemployment.

The Prime Minister's salary has been slashed by 36 per cent to $2.2 million, while a junior minister's pay has been cut by 37 per cent to $1.1 million.

The report will be published as a White Paper and debated in Parliament on Jan 16.

andreao@sph.com.sg

ATTRACTING TALENT

In 1970, then Prime Minister Lee Kuan Yew told Parliament ministers' salaries were being increased because he wanted to appoint newly elected MP and ex-Development Bank of Singapore head Hon Sui Sen as the Finance Minister. It was the first time since 1955 that ministers' salaries were raised.

'If we do not pay ministers adequately, we will get inadequate ministers. If you pay peanuts, you will get monkeys for your ministers. The people will suffer, not the monkeys.'

Then Prime Minister Goh Chok Tong (left) addressing Parliament in 1993, when a pay rise for ministers was announced

KEEPING SINGAPORE CORRUPTION-FREE

'I am probably the highest paid in the Commonwealth if you go by official salary. But I am probably one of the poorest in the Commonwealth... I am one of the best paid and probably one of the poorest of the Third World prime ministers.'

Then PM Lee Kuan Yew (right) said this in 1985 in response to Workers' Party MP J.B. Jeyaretnam, who had charged that ministers here were paid much more than their counterparts in other countries like Malaysia, Australia and Britain. Mr Lee said Singapore ministers did not get hidden perks, unlike those in other countries, and the clean wages paid to them helped keep the administration corruption-free

BIGGER VARIABLE

In 2000, the variable component of ministers' pay went up from 30 to 40 per cent. This way, said then Deputy Prime Minister Lee Hsien Loong, a larger part of a minister's pay would depend on his performance and the state of the economy.

CALL FOR FIXED PAY

In 2000, opposition politician Chiam See Tong (right) called for a monthly salary of $50,000 for ministers - enough to pay for a bungalow, servants, two cars, annual holidays and their children's education.

What price political leadership?
ST Editorial

SEVENTEEN years after the 1994 White Paper on ministerial salaries, a new committee has taken another stab at a perennially tricky issue that has exercised the best minds here and elsewhere: What price political leadership? It should be commended for its efforts, given that the very matter of determining salaries of political office-holders is a sensitive issue that cuts close to the hearts of many Singaporeans. In its long-awaited report, the committee's recommendations included salary cuts of slightly more than a third for the Prime Minister and entry-level ministers. In so doing, it has tried to balance two contending schools of thought - pragmatism (the need to offer top dollar for top talent) and the philosophy of public service and sacrifice.

This wasn't an easy exercise. But the eight-member team didn't have to start from scratch. Singapore has had 17 years of trying out a formula and various permutations of it in its search for a workable system of rewarding political leaders. There have been two clear lessons from this experience. First, even the most elegant and logical formula is useless if it cannot be applied in practice. That was the case with the existing method. Because the benchmark salaries pegged to the top 48 persons in the selected professions raced so far ahead of the general population, they could not be implemented without creating a public uproar. By 2000, for example, actual ministerial salaries were only at 70 per cent of the benchmark.

This leads us to the second lesson - whatever the formulae, and no matter whether they achieved their desired objectives of attracting the most suitable candidates, they have to be acceptable by the majority of the people. The current benchmarks were clearly not, and had to go.

Is the new formula more acceptable? It is hard to say, given the emotional nature of this issue. Also, acceptability is not an unchanging condition. New circumstances, and a changing electorate, might make what is politically acceptable today, less so in the future. Hence, the committee's recommendation to have a new group look at the issue every five years.

All things considered, the changes recommended should remove some - but not all - of the unhappiness. However it turns out, one truism will not change: Singapore's success as a nation is critically dependent on having the island's best to lead - men and women who are committed to serving the people and have the intellect and the wherewithal to continue to make its success as long-lasting as possible. That, lest anyone forgets amid all the number-crunching, is the object of the exercise. Singaporeans have to be clear about this, or remain forever vexed by how much to pay their leaders.

-----
Time for leaders to find the 'fire' again?

By Andrea Ong

ON WEDNESDAY, a committee commissioned by Prime Minister Lee Hsien Loong to review ministerial pay issued a report recommending a raft of changes to how salaries should be calculated.

This is the second major report since the White Paper in 1994 that brought about the system of pegging ministers' pay to the private sector.

What has changed since 1994 and 1970, when ministers got their first raise? Insight looks at four burning questions over the years.

Does high pay = the best ministers?
ONE key principle behind paying ministers wages that are competitive with the private sector is the need to get the very best of Singaporeans to form the Government.

This principle has not budged over the years. Singapore's three prime ministers have emphasised repeatedly that good government - the nation's most precious asset - did not come about by chance.

It came about by getting capable and committed people to become ministers, a job more challenging and complex than being a CEO or doctor.

The Government believes that the opportunity cost for such talent to enter politics should not be too high. Besides sacrificing privacy and family life, they should not have to suffer financially too.

And as ministers need time to grow in their jobs, they must cross over to politics in their prime.

The review committee headed by Mr Gerard Ee emphasises this point in its report. 'While money should never be the motivation for anyone becoming a politician, the financial sacrifice should not be so large that it discourages outstanding and committed Singaporeans from devoting the best part of their lives to political office,' says the report.

However, detractors over the years have argued that the pay was just too high. Writer Catherine Lim argued in 2007 that the high pay contributed to the 'affective divide' between the People's Action Party (PAP) government and the people.

Others have warned that the idea of paying for the best to join politics may encourage people to join for the 'wrong' reasons, as PAP backbencher Denise Phua argued passionately in 2007.

'The lure of personal prestige and monetary gain can produce a dangerously intelligent and self-interested class of political elites who will readily compromise the national interest to satisfy their own needs,' said Associate Professor Kenneth Paul Tan from the Lee Kuan Yew School of Public Policy in a 2008 article.

However, then-Deputy Prime Minister Goh Chok Tong made it clear in 1989 that men who are in it for the money are unfit to be ministers. 'If you think that the salary is so attractive that you want to be a minister because of the salaries, you are unlikely to pass our screening test.'

Government leaders have also argued for 'a sense of proportion' by comparing ministers' pay to the size of the national economy that they are in charge of.

Does high pay prevent corruption?

ANOTHER reason for competitive ministerial pay is to prevent corruption and maintain transparency.

The committee's report highlights the need to pay ministers a 'clean wage' with no hidden perks.

While other countries may pay their ministers less, the ministers may in fact get much more under the table in benefits.

This argument has been used by government leaders to counter those who compare Singaporean ministers' salaries with those of their foreign counterparts.

A commonly cited example is the US President, who earns less than PM Lee on paper but whose expenses, including housing and his own plane, are borne by taxpayers.

In 2000, then Senior Minister Lee Kuan Yew said that only 'constant vigilance' had allowed Singapore to escape the corruption, collusion and nepotism problems which have plagued the region.

'Our market-based pay and allowances will give no excuse for any slippage,' he said of Singapore's good track record.

However, in a 2010 book on Singapore's public administration, political scientist Jon Quah points out that the PAP government had put in place stringent anti-corruption laws even before it began raising pay for ministers.

Former Potong Pasir MP Chiam See Tong argued on several occasions that high pay would not satisfy a minister bent on being corrupt. It would 'make him only more greedy for more money', said the opposition MP in 1994, citing the late minister Teh Cheang Wan who committed suicide in 1986 after being investigated for accepting bribes.

Should ministers' pay be benchmarked to private sector?
THE decision in 1994 to peg ministerial pay to the top income earners in Singapore has been one of the most controversial aspects of the debate over the years.

MPs have argued that the benchmark is unfair as the top earners in the private sector change every year, while ministers stay put in their jobs for years. The formula could also be skewed upwards as many of the top earners are extreme outliers.

Opposition parties have suggested pegging ministers' pay to the income of the poorest 20 per cent instead.

Other MPs, however, accept that pegging ministers' pay to the private sector is part of the 'market reality'.

The committee's report goes some way in addressing these concerns. It has widened the sample size of top income earners from 48 to 1,000.

Another point of disagreement is how much variable pay ministers should get.

A high variable component means larger swings in salary from year to year.
In line with private sector practice, the variable component of a minister's annual package increased from 30 per cent in 2000 to 47 per cent in 2007.
However, the committee has recommended cutting it.

A 'GDP bonus' introduced in 2000 was seen as an inducement to ministers to focus on economic growth at all costs. The committee now wants to replace the GDP bonus with a National Bonus which includes additional indicators like real income growth of the poorest 20 per cent.

What do we look for in our ministers?
THE debate over ministerial pay boils down, ultimately, to what Mr Lee Hsien Loong asked in 1993: 'What sort of men do you want to hold this job?'

On one side are those in favour of the spirit of public service and moral authority - two commonly used terms. Serving the people should not be about dollars and cents but about being honourable and sacrificing for the nation.

In the other camp are the more pragmatic PAP leaders, who question if it is realistic to expect to get a dream team of ministers without paying them more competitive rates.

The three prime ministers have all dwelt on the changing aspirations and nature of Singaporeans since the 1950s.

In those 'tumultuous times', Mr Lee Kuan Yew once said: 'Asia was in ferment: the shape of our lives was being altered irrevocably. In that revolutionary ferment, any man with any courage, any fire in him, would respond to the challenge.'

Times and the people have changed since. As PM Lee reiterated in 2007, the Government cannot expect everyone to be like that.

Still, the benchmark for ministers' pay has always included a discount from the private sector to signify the personal sacrifice involved in public service. The committee has now recommended increasing the discount from a third to 40 per cent.

Under the terms of reference given by PM Lee, ministers' pay has been reviewed and cut independently of that of the elite Administrative Service for the first time - a signal that elected political leaders should have a calling of their own.

The titles of the 1994 White Paper and the new report are also telling. Where the former emphasised 'competitive, competent and honest' government, the latter speaks of a 'capable and committed' one.

Perhaps it is time for Singapore's political leaders to find that 'fire' in them to shape Singaporeans' lives once more, as the Old Guard ministers did.

Post-war Beveridge Report in Britain led to system that is now widely abused

By Jonathan Eyal

London - Exactly 70 years ago at the height of World War II, a report was presented to the British Parliament. It was bound in a brownish cover, and bore a tedious title: Social Insurance And Allied Services. And it was authored by William Beveridge, a little-known academic.

Since this was the moment when ordinary Britons were struggling just to survive as German bombs rained down on their capital, nobody expected the paper to attract much attention.

Yet it did, and how. People queued to buy the publication, and the Beveridge Report went down as one of the most important political documents in modern history. It laid the foundation for all government welfare projects which followed - public housing, unemployment benefits and health care. And it inspired similar programmes around the world, including Singapore's own Central Provident Fund scheme.

However, last week's anniversary of this seminal report went almost unnoticed. The Conservatives in the coalition government want to dismantle much of Beveridge's inheritance, and even the opposition Labour Party admits that the Britain he envisaged 'is now a very different country'.

The reason for Beveridge falling out of favour is that the welfare system for which he is held responsible has grown into an unaffordable monster which is widely abused, discourages personal responsibility, and also fails to eradicate poverty.

Just a few figures should suffice. Under Britain's laws, the local authorities are obliged to provide a roof for every homeless person, even if the person is a foreigner. The total bill for this alone is £20 billion (S$40billion) a year. Claimants carry no personal responsibility; the more children they have, the bigger the property to which they are entitled.

The central government spends another S$212 billion yearly on welfare. But because this is divided among 27 different types of benefits and is often distributed regardless of personal circumstances, individual payments are too small to treat real poverty.

Unemployment benefits often mean that people have no incentive to find work. And health-care spending, which devours an additional S$250billion a year, is still not sufficient, so cancer patients suffer agonising delays when seeking treatment. The result is that Britain has one of the most comprehensive cradle-to-grave welfare provisions, but also one of the biggest wealth disparities in the industrialised world. The critics claim that everything goes back to Beveridge.

But the accusations are unfair. Contrary to the prevailing opinion, Beveridge was neither a socialist nor an advocate of limitless welfare payments. He wanted to put an end to what he called the 'five giants' - poverty, disease, ignorance, squalor and unemployment - but he believed that people should contribute as much as they claim back from their state.

Beveridge's centrepiece was the creation of a state-run system of compulsory insurance into which every worker was expected to pay, and from which every citizen could draw benefits when sick, unemployed or retired.

Alongside this provision, Beveridge proposed universal access to education and health services, all financed from taxes. The beauty of the scheme is that it created a bond, a new contract between citizens: payments were not charity, but an entitlement, paid for by its beneficiaries.

Beveridge's answer to the problem of people who just milk the system was simple: 'Unemployment benefit after a certain period,' he wrote, should be 'conditional upon attendance at a work or training centre.'

And, although his supporters now prefer to forget this detail, Beveridge initially suggested that those who could not or would not work should be deprived of the ability to vote.

So, it was not Beveridge who is responsible for Britain's perverse welfare system, but subsequent generations of the country's politicians, who used his concepts in order to invent schemes which were ultimately unaffordable.

The rot set in right from the start. Beveridge's initial suggestion was that ordinary Britons would only start enjoying protection 20 years after his insurance scheme was first established. But the Labour Party which came to power at the end of the World War II decreed that benefits were to be made available immediately. Politicians always found it easier to offer welfare entitlements, but much more difficult to tax people in order to finance them.

That game could work only as long as Britain's economy and its population were growing, and only as long as it remained an industrial powerhouse. It never occurred to Beveridge, who was born in India to a family of colonial administrators, that Asia would become an economic competitor. Nor did it ever occur to him that labour markets would be freed, so that British citizens would have to compete for jobs at home.

But over the past decade alone, about a million people from other European Union countries have come to Britain, often better-educated and more willing to work than some of the natives. And roughly half of Britain's children are now born to broken families, a phenomenon which was virtually unheard of when Beveridge presented his ideas in 1942.

In short, the world which Beveridge envisaged, one of regulated markets and of Western dominance, has gone. It's not so much that he was wrong, but that he was right for an age which no longer exists. Britons can still argue about how they should divide their economic cake. But it's a much smaller cake, and one which is increasingly half-baked.

That is accepted by all of Britain's politicians. Even Labour, which created the system, is vowing to reform it. Mr Liam Byrne, its spokesman on welfare, promised last week to 'reclaim Beveridge's vision', a polite way of saying that matters cannot continue as before.

His comment sparked off predictable outrage from those who still treat Beveridge as religion: 'An insult to his memory' was how The Guardian summed up the debate.

But Beveridge himself would have probably taken the criticism in his stride. For his last words in 1963 were an admission of his fallibility: 'I have a thousand things to do,' he complained on his deathbed.

That task is now left to his successors. And they still don't know what to do with the scheme which the great man inspired.

On June 18, 1930, a Dutchman died in the city of Haarlem (now part of Amsterdam), in the Netherlands. In his will, he left his whole estate to Singapore. Who was this man?

His name was Karel Willem Benjamin van Kleef. He was born on Nov20, 1856, in Batavia (now Jakarta). His father was Salomon Benjamin van Kleef, a gynaecologist. His mother was Geetruida van Hogezand. Both Salomon and Geetruida were Jewish. They had met and married in Batavia on Nov25, 1850.

Dr and Mrs van Kleef had four children. The first child, Maria Elizabeth, was born in 1851. Karel was the second child. The third child, Wilhem Samuel, was born in 1856 and died a year later and was buried in a cemetery in Jakarta. The fourth child, Herman, was born in 1863 in Amsterdam.

We know nothing about Karel's childhood and education. All that I have been able to find in the Dutch National Archives and Dutch National Genealogical Centre is a certificate (undated), certifying that he was an expert in drilling in the mining industry.

Karel had worked in the mining industry in Indonesia. At some point in his adult life, Karel left Indonesia and relocated to Singapore. We are not sure what he did for a living in Singapore, but we know that he was successful and became prosperous. He left Singapore and retired in Haarlem, the Netherlands, where he died.

How much money did Karel van Kleef leave to Singapore? He left the sum of $160,000, which, in today's dollars, would be equivalent to $8.985 million.

Why did Karel van Kleef leave his entire estate to Singapore? We do not know why he chose to do so. He could have bequeathed his estate to his older sister, Maria, or her children. He could have chosen to benefit the land of his origin, the Netherlands, or the land of his birth, Indonesia. Instead, he chose to bequeath his entire fortune to Singapore. This is why I call him 'the man who loved Singapore'. I know of no other person, Singaporean or non-Singaporean, who has bequeathed his entire fortune to Singapore.

What did Singapore do with the money? In 1931, the municipal government set up a committee to make recommendations on the best way to use the money. The committee considered three options: a landscaped garden, an aquarium and a zoological garden. In 1933, it was decided to build an aquarium and to name it the Van Kleef Aquarium. However, the construction was delayed by the difficult situation in Europe and the outbreak of World War II.

The Van Kleef Aquarium was finally opened in 1955, 25 years after the benefactor's death. The aquarium was a great success and attracted 166,000 visitors in its first four months of operation. The annual visitorship climbed steadily from about 200,000 to a peak of 400,000.

The aquarium was closed in 1991 because it was unable to compete with the new Underwater World in Sentosa. It was privatised and re-opened as the World of Aquarium. It failed after two years. It changed hands again and re-opened as the Fort Canning Aquarium in 1993. In December 1996, the aquarium was closed for the final time. Two years later, in 1998, the building was demolished and, with it, the name of our benefactor, Karel van Kleef.

Singapore should not allow the name of the only person who loved us so much that he bequeathed his entire estate to our country to disappear from our collective memory. I cannot help comparing him with an Englishman, James Smithson, who made a similar bequest to America. The US Congress accepted the bequest with gratitude and established the Smithsonian Institution in his memory. The Smithsonian Institution is today one of the great cultural institutions of America and of the world. Let us think of an appropriate way to perpetuate the memory of Karel van Kleef.The writer is special adviser to the Institute of Policy Studies.